From today the Employment (Allocation of Tips) Act and the statutory Code of Practice on fair and transparent distribution of tips comes into force.
These changes will require employers to pass all tips, gratuities, and service charges on to workers, without deductions. From today, if an employer breaks the law and retains tips, a worker will be able to bring a claim to an employment tribunal. Most employers already pass on tips to the staff who earn them, however these laws will crack down on the minority of businesses who continue unacceptable tipping practices. Employers in the wrong could be made to pay fines or compensation to staff, with workers able to hold bosses fully accountable through employment tribunals.
All operators should review the guidance and ensure their policies are compliant with the legislation. There is a Statutory Code of Practice – Distributing Tips Fairly, which can be found here. There is also a Non-Statutory Guidance – Distributing tips fairly, for employers which can be found here.
Employers should note that they have a duty to have a “tipping” policy in place and that under the new regulations, staff have the right to see their employers’ tipping policy and a record of how many tips were given.
Where employers choose to operate a tronc scheme under which a troncmaster decides on distributions independently of the employer, this guidance is intended to support the employer’s assessment of whether the troncmaster’s decisions are likely to be considered fair.